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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: JRH who wrote (32681)	3/8/2000 1:41:00 AM
From: JRH	Read Replies (1) \| Respond to of 77400

Cap Gemini and Cisco Systems Combine Efforts in Strategic Alliance to Help Drive Internet Economy Cap Gemini Announces the Formation of a New Global Company to Provide Consulting Services, Systems Integration and Internet Services for the Internet Economy PARIS and SAN JOSE, Calif.--(BUSINESS WIRE)--March 8, 2000-- Cap Gemini, one of the global leaders in management consulting and IT services and the second largest systems integrator in the telecommunications world, and Cisco (Nasdaq:CSCO - news), worldwide leader in networking for the Internet, have decided to join forces in a strategic alliance to help drive the Internet Economy. The newly formed company will be a subsidiary in which Cap Gemini S.A. will hold a 95.1% stake and Cisco will hold a 4.9% stake. Cisco will invest 870 million euros (US $835 million ) in the Cap Gemini Group: an investment of 170 million euros (US $164 million ) in the new company, which reflects a 20% discount for Cisco's minority shareholder position, and a capital investment in Cap Gemini S.A. of 700 million euros (US $671 million) through a reserved capital increase (calculated on the basis of the average share price on the Paris Stock Exchange for the twenty days preceding the date of the signature of the agreement, as increased by a 5% premium on the stock price). Upon closing, Cisco will receive 2.6 million shares of Cap Gemini S.A. Upon the creation of the newly formed company, the Cap Gemini Group will contribute 4,600 people, mostly specialists from its international division that heads the Telecom & Media sector (Global Market Unit), experts in transport data and network design and implementation from the Group's various divisions, and management consultants from its Gemini Consulting organization. Cisco will also make available a virtual team of its network specialists to the new company. Expanding the ecosystem of Internet-connected partners, this transaction follows the announcement made earlier this year by Cisco that it plans to make several strategic investments in consulting firms. Likewise, this also follows Cap Gemini's long term stated commitment to helping its clients lead the Internet economy. With a shared vision that the Internet is fundamentally changing the economic models of both corporate enterprises and telecommunications service providers, Cap Gemini and Cisco intend to provide these groups with global solutions in the areas of consulting, services and technologies to enable them to benefit from the opportunities in the new area of data, voice and video integration which the Internet economy offers. ``For many years, Cap Gemini has been a substantial player in helping telecommunications service providers and large enterprises build their telecommunications networks and operations support environments. More recently, we have also become a leading force in helping companies transition their businesses to the networked economy. The formation of the new company with Cisco, the leading provider of Internet technologies, allows us to marry these two disciplines, providing a professional services capability unmatched in the world in its ability to help telecom operators and large enterprises move in full-force to the networked economy,' said Paul Hermelin, a member of Cap Gemini's Executive Board. ``Today's announcement underscores the trend toward a new business model where Internet solutions are provided through an Internet ecosystem of partners. This ecosystem is based on open, standard-based technology and allows hundreds of companies to participate,' said Don Listwin, Executive Vice President of Cisco Systems. ``Together, Cap Gemini and Cisco are expanding the ecosystem to deliver solutions that will help our service provider and enterprise customers compete and survive in the Internet Economy.' With a substantial focus in Europe, the newly formed company will have a global scope and will extend throughout the U.S. and Asia. Its main objectives will be as follows: -- To accelerate the creation and deployment of offerings for traditional telecom service providers (fixed telephones and mobiles), suppliers of services and Internet access sites and players in the world of the media (in particular cable-operators). -- To become the market leader in enterprise network services. The new entity will be headed by Alexandre Haeffner, currently Chairman of Cap Gemini's Telecom & Media unit, and will have a board composed of five representatives of Cap Gemini and one representative from Cisco. In consideration of Cisco's equity investment and its contribution in Internet expertise to the company, the agreement provides that in case of a takeover bid by one of Cisco's major competitors for the Cap Gemini Group, Cisco will have the option to purchase 100% of the shares held by Cap Gemini in the new company.